Nice one. Yeah I still expect there to be more downside to it. Last time I closed it out because of the overall market was causing the sell-off. It was tempting here to look for the $250-260 range on the trade (August-September I rode it from $360 to $26x) but going to be less greedy this time

Obviously a 13% fall in stock price is not trivial for Tesla. But of course that isn't what I said. I said there is a trivial difference in the difficulty for a 54 billion or 62 billion market cap company to raise a billion dollars in cash. And that still holds true for the price of the stock at close today.

Keed, the "Musk can't raise" logic is not a question beg, although it is a little in the dumber theses.

It's pretty simple. Musk has greatly hurt Tesla's short, medium and long term by not raising. He has done this because:

1. He's completely insane
2. He can't raise for some reason
3. He can raise but would require disclosures of MNPI that are extremely damaging, so he's trying to survive
4. ?????? (fill in the blanks here)

There's no other choice at this point imo given the damage that's being done and has been done to Tesla by the lack of sufficient capital, capital which, as you point out, they could "easily" get if (2) and (3) are false. The idea that not raising is evidence of (2) or (3) comes from the notion that (1) probably isn't true.

Bagholder Quotes is gonna be lit tonight.

Me too.


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Same :/

Yep, you have to consider it from the rational actor standpoint or even from a greedy and vengeful Musk standpoint, especially given how much Musk hates shorty.

With the stock at 350-370, he could've crushed shorty completely by doing a 35% dilutive raise to get 15-20b, paid off all debts and AP and still have 5-10b in working capital. Even if the price drops 35%, shorty would be forced to cover so the stock would probably still stay stuck around 280-300 or so, so no harm done to Musk's margin call.

Accompany that with Musk's flair for revealing new products (Model Y, Semi, 35k M3), or even better a partnership with Magna Steyr to facilitate the 35k M3, and bulls would toss their money hand over fist to buy the equity and shorty would be forced to surrender. The latter case especially; if he had done that and partnered with Magna Steyr, even Chanos, Einhorn et al. would've given up and covered as the bear case is deader than a doornail at that point.

So the question is why hasn't he done that given that he has had ample opportunity to do so? Does he hate free money? Does he not want to put Tesla in a position with a healthy balance sheet generating positive cash flow? If the market cap jumps to 100b from that result, he gets a 1b bonus per his employment agreement, so there are zero rational reasons not to go for it unless he just hates money.

There is nothing in the email that says TSLA isn't laying off people in production.

Saw an interesting quote from a person laid off today on reddit:

"It doesn't seem like there was much planning. I just know that I was basically given 30 min to clean out my stuff and I seemed to be the only one worried about what was going to happen to the things I was working on."

"I was an instructional designer for the global team, so I designed a lot of training for basically everyone. I'm heartbroken, and I feel lost. I loved this company more than I've every loved another. I guess I understand the rational, but still....I worked many 80+ hour weeks to get "essential" training out to people, and now that's done. "

So seems they are desperate for cash with no care for transitioning anyone's work who was let go.


https://www.reddit.com/r/teslamotors..._got_laid_off/

I have actually seen startups do stuff like this... hire to accelerate a ramp up then cut. Then rinse and repeat. It’s actually an old trick from last century to make sure unproductive workers don’t get to stick around and those that stick around are pushed to their limits.

A famous incarnation of this is Jack Welch’s suggestion to fire 10% of your work force every year.

Welch’s idea is out of favor in management literature but it is still the unofficial policy in a lot of industries. Every industry where you hear “up or out” fits. Start up is one of those industries.

Musk is firing people because he thinks he can. He will hire again very soon... is probably hiring already now for people that he thinks he needs.

The bears still at it trying to justify their complete misguided judgement over the past three years.

So, Tesla is cutting a substantial number of people on the back of hiring a lot of them to increase production in the second half of 2018. Elon comments on the fact that they cannot live off higher priced cars forever - no **** Sherlock... bears, of course, count it as a victory.

Having said all of that, the stock price is still higher than it was three years ago and bulls pad themselves on the back for being able to make money shorting the stock at $350 to $300 - well done, that is going from GM to Ford market cap, isn't it?

TSLA will obviously make it through 2019, but the big challenge is the affordable car. The international expansion will serve them well in the first half, but will be more challenging in the second half.

If the electric car market was to expand significantly in 2019 (which is very unlikely given the economic outlook), TSLA would profit massively and the more affordable car would be postponed.

The most pleasing thing about this thread is the fact that the bears have been catastrophically wrong over the past three years and continue in their arrogance. We are entering year 4 and let's see how much arrogance that builds up.

whatever helps you sleep at night...

whatever helps you sleep at night...

Spurious sounding like a bitcoin bull

whatever helps you sleep at night...

I thought once TSLA hit profitability with the Model 3 they could start focusing more on their big growth ideas so that TSLA's valuation can be somewhat justified. Instead it appears TSLA is nowhere near any sort of sustainable profitability and will continue to have to focus on learning how profitably mass produce vehicles like automobile manufacturers whose PEs are well below 10. Focusing on the Model 3 is even more ludicrous when you consider that passenger cars are much less profitable than SUVs, crossovers, and trucks.

If it's unlikely then why mention it rather than mentioning it shrinking significantly in 2019 which seems far more likely given the economic outlook.

Elon Musk himself said that Tesla was very close to bankruptcy during the Model 3 ramp up.

Im only here to read what ASAPs take is on the layoffs, that guys insights are unmatched

Jack Welch, really? How is GE doing these days?

When Elon says they can't live off the back off higher priced cars forever he apparently meant more than one quarter. After investing billions over the course of more than two years to launch their latest high priced car.

Pretend you have no idea the press release is from Musk and Tesla.

Does it read like a company that is on solid footing and will "obviously make it through 2019?"

Or does it read like a desperate company in the midst of a cash crunch?

Tesla certainly is not behaving like a growth company

One thing not really pointed out is that the 44k car less 7k incentive was close to the 35k model, so the 35k model isn’t going to be much of a savior, some run rate increase but likely not near enough, obviously will help in foreign markets but I doubt it costs the 35k equivalent in foreign markets

I feel like the 35k car was always meant as the 27.5k car. Only this could pull in another 250k reservations. This buyer:

-Is still stretching to spend 27.5k, this is already a world of money for them

-Believed in additional savings from home charging, no oil changes, etc. Saving $15 a week counts as real money to them

-Would never touch Porsche level insurance and accident repair costs


They should have released the Y as the 3rd model

-Upscale luxury small cross over, hottest market going

-Maintained a family front end to create/develop the Tesla luxury brand

-Produced at lower volumes to avoid production disasters

-Naturally much larger margin built in, base could have been 29.95k after credits or something


Everything about the Model 3 has been an unforced error-

No, it is just based on a premise you disagree with, which is that Tesla needs to/has needed to raise capital (badly). Since they didn’t/haven’t, it is evidence that they couldn’t/can’t (although obv not dispositive). They also don’t have a reg statement effective w the SEC and are no longer a WKSI afaik, and were granted only a reg D waiver by the SEC following Elon’s settlement. There is no smoking gun, it depends entirely on what inferences you think are reasonable wrt a bunch of different things.

Re raising to pay the converts- Practically speaking, it’s not really plausible that they will be able to do a public equity raise before the 3/1 convert maturity date bc the SEC is closed and not reviewing/approving reg statements, which are also subject to comment by the SEC (which can take a while depending on what is in the statement). This is setting aside the issue of whether it is realistic for a $60b mkt cap company to ask the equity markets for $1b in order to pay a debt coming due, altho maybe you are assuming that they don’t need $ even net of convert repayment (which seems a bit circular to me in the context of this hypothetical).

Most of the people who are really stretching to spend $27.5k/$35k wouldn't have been able to take full advantage of the $7500 tax credit, so that math is a little off. I think you're also overestimating what percentage of the reservations actually would have been planned out well enough to incorporate the savings from home charging/oil changes/etc.

Strongly disagree. The market at $27k (effective) is waaay bigger than at $37k. If Tesla made the $35k base model as promised they would have more demand than they could meet. They just can't come anywhere close to profitability at that price point.

I also disagree with the first part of this post. You only need to make about $58k in taxable income to incur a $7.5k tax bill.